If you’re struggling to make your student loan payments, you’re not alone. Between rising living costs and fluctuating interest rates, many borrowers find themselves needing a temporary break from repayment. One option that can provide short-term relief is student loan forbearance, but it’s important to understand what it really means before deciding if it’s right for you.
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What Is Student Loan Forbearance?
Student loan forbearance is a temporary pause or reduction in your loan payments, usually for up to 12 months at a time. It’s designed to help borrowers who are experiencing financial hardship, illness, or other short-term challenges that make it difficult to keep up with regular payments.
While forbearance can give you breathing room, it doesn’t stop interest from accruing on most types of loans. This means your total balance can grow even while you’re not making payments, so it’s not a long-term solution.
General vs. Mandatory Forbearance
There are two main types of student loan forbearance: general (discretionary) and mandatory.
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General Forbearance (Discretionary):
Your loan servicer has the discretion to approve or deny your request. You can apply for general forbearance if you’re experiencing temporary financial problems, medical expenses, a change in employment, or other personal difficulties. -
Mandatory Forbearance:
In certain situations, your loan servicer is required to grant forbearance if you qualify. Common examples include serving in a medical or dental internship or residency, performing service in AmeriCorps, being a member of the National Guard activated by a governor, or if your total student loan payments are 20% or more of your monthly gross income.
Mandatory forbearance provides a bit more certainty if you meet the qualifications, while general forbearance depends largely on your servicer’s discretion.
Forbearance vs. Deferment: What’s the Difference?
| Feature | Forbearance | Deferment |
|---|---|---|
| Purpose | Temporary pause or reduction in payments due to financial hardship or personal issues | Payment pause due to specific qualifying situations (school enrollment, unemployment, military service, etc.) |
| Interest Accrual | Interest accrues on all loan types (subsidized and unsubsidized) | Interest may not accrue on subsidized federal loans or Perkins Loans |
| Duration | Typically up to 12 months at a time | Varies depending on the deferment type |
| Eligibility | Based on financial hardship or servicer discretion | Based on specific qualifying events or conditions |
| Best For | Short-term financial struggles | Longer-term qualifying situations with limited income |
Bottom line:
If you qualify for deferment, it’s usually the better choice since subsidized loans may not accumulate interest during that time. Forbearance is best when you need quick, temporary relief and don’t qualify for deferment.
What Happens With Interest and Repayment During Forbearance?
One of the most important things to understand about forbearance is that interest continues to accrue on all types of loans, both subsidized and unsubsidized.
If you don’t pay that interest while your loans are in forbearance, it will be capitalized (added to your principal balance) once forbearance ends. That means you’ll end up paying interest on a higher balance, increasing your total repayment amount over time.
For example, if you owed $20,000 and $1,000 of interest accrued during forbearance, your new balance after forbearance could become $21,000, meaning future interest is calculated on that higher amount.
When forbearance ends, your regular payments resume, and your repayment term may be extended depending on how long you paused payments.
When Forbearance Makes Sense and When It Doesn’t
Forbearance can be a helpful tool, but it should be used strategically.
When it’s a good idea:
- You’re facing a temporary financial hardship (like a job loss or medical emergency) and expect your situation to improve soon.
- You’ve exhausted deferment options (which may allow interest-free pauses for certain loans).
- You need a short-term solution to avoid delinquency or default while getting back on your feet.
When it’s not a good idea:
- You have long-term financial struggles or don’t have a plan to resume payments. In this case, you may be better off exploring income-driven repayment (IDR) plans, which can permanently lower your monthly payments.
- You want to reduce total loan costs. Since interest keeps accruing during forbearance, it increases what you’ll ultimately pay.
- You’re eligible for loan forgiveness programs (like Public Service Loan Forgiveness). Pausing payments can delay your progress toward forgiveness.
The Bottom Line
Student loan forbearance can provide valuable breathing room when you’re struggling, but it’s not a free pass. Interest keeps adding up, and your balance can grow quickly. Before you request forbearance, explore alternatives such as income-driven repayment, deferment, or refinancing.
If forbearance is the right move for you, try to pay at least the accruing interest during the pause to prevent your balance from ballooning. Used wisely, forbearance can help you stay afloat financially; just don’t let it become a long-term habit.
